A Lapsed Car Insurance Policy? 4 Steps to Get Your Car Insured

Realising that your insurance policy has lapsed can be a dreading experience for many. Unlike a phone bill or an electricity bill where you can continue using the services by just paying a late fee, the implications of a lapsed insurance policy are more serious. Let’s look at some key implications.

A lapsed car insurance policy can cost you dearly. Here are few implications of a lapsed insurance policy

• Illegal to Drive: It is illegal to drive a car on public roads without a valid insurance policy. You could face a hefty fine of Rs 2000.
• NCB Loss: You can lose all your No-claim Bonus if you do not renew within 90 days of the lapsed policy.
• Financial Risk: You will have no insurance coverage during this period in case of an accident. All the damage caused to third-party or your own car will have to be borne by you.
• Time-consuming: Buying a policy after it has been expired can be a time-consuming task. In case you opt for a comprehensive policy, the insurance company will survey your car before granting you the policy.

While there are implications of a lapsed policy, there is no reason for panic. You can renew or buy a policy in just 4 easy steps:

• Choosing the Right Insurance Company: In case you are buying a new policy from scratch, you can change your insurer.
• Choose Between Comprehensive and Third-party Policy: While a comprehensive policy is more expensive than a third-party policy, it offers much wider coverage. However, if you buy a third-party policy, you will not have to get your car surveyed, and the process can be quicker. If you are choosing a comprehensive policy, you are two steps away from a policy in your hand. But before that, a few more important points to remember.
• Know Your NCB: It is essential to know if you are eligible for No Claim Bonus (NCB) discount. Just because your policy is expired doesn’t mean you lose your NCB. In case it has been less than 90 days since your policy got lapsed, you can still claim the applicable discount on the own-damage premium.
• Choose the Add-ons: It is important to choose the right add-ons to ensure proper protection of your car.

• Check with Your Insurer: The moment you realise that your policy has lapsed, contact your insurer to check if the policy can be re-instated. In some cases, your insurance company might allow you to renew the policy without any further steps. If that is the case, then it is a fairly easy road for you from here on. However, if the policy cannot be re-instated, then you may have to follow a few extra steps.
• Choose the Right Insurance Policy: It is important to choose the right policy. For choosing the right policy, there are a few things you will have to pay attention to.
• Vehicle Survey: Once you have chosen the right policy, contact the company and set up a time for a vehicle survey. An insurance company official will come to examine the car and click a few photos. Depending on the condition of the car, the insurance may be denied or allowed to you. Moreover, if some part of the car is damaged, it may be left out and not covered in the policy.
• Buy the Policy: Once the vehicle survey is done, you have about 24-hours to make the purchase. Pay the applicable amount through any means as stated by the company and make sure you get a copy of the document in your hands or email.

While renewing a lapsed car insurance policy can be a time-consuming process, it can become a bit easier if you know some basic steps. If you are quick to act, you can get a valid policy in your hand in no time. Remember to renew your policy on-time from next time. Most companies send you reminders through emails or phone calls a few weeks before the renewal is due. Use those reminders and ensure you have a valid policy.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.